Soybeans hit 3-week high on dollar weakness, short-covering

A Chinese ship is loaded with soybeans at Port of Santos May 19, 2015.  REUTERS/Paulo Whitaker

Chicago soybean futures climbed for a second straight session on Monday to a three-week high with a weaker dollar and short-covering by investors driving the market higher.

Corn and wheat rose as grain markets recouped last session’s decline, although improving U.S. weather and ample world supplies kept a lid on prices.

The most-active soybean contract on the Chicago Board Of Trade was up 0.6 percent at $9.66-3/4 a bushel. Earlier in the session, it climbed to $9.68 a bushel, its highest since March 30.

Corn advanced 0.8 percent to $3.66-1/2 a bushel, having closed down 0.1 percent in the previous session. Wheat gained 0.8 percent to $4.24-1/4 a bushel after declining 0.2 percent on Friday.

“Today’s trade is driven mainly by dollar weakness,” said one agricultural commodities analyst.

“The focus is on U.S. planting. We also have speculators holding large net short positions and that has left the market vulnerable to short-covering.”

Large speculators increased their net short positions in CBOT corn futures in the week to April 18, regulatory data released on Friday showed.

The Commodity Futures Trading Commission’s weekly commitments of traders report also showed that non-commercial traders, a category that includes hedge funds, increased their net short positions in CBOT wheat and soybeans.

But on Friday, funds were net sellers of wheat and corn contracts, while they were net buyers of soybeans, soymeal and soyoil.

The euro scaled five-month highs against the dollar in early Asian trading on Monday after the centrist candidate swept to victory in the first round of the French presidential election, reducing the risk of an anti-establishment shock in the final round.

A weaker dollar makes the greenback-priced U.S. commodities cheaper for foreign buyers.

While corn is likely to face pressure as U.S. planting weather improves while rains in the Plains are expected to benefit the hard red winter wheat crop.

Statistics Canada pegged the country’s all-wheat area at 23.2 million acres, down 0.1 percent from last year. The estimate was bigger than what traders and analysts expected. Canola seedings were forecast at a record 22.4 million acres.

Farming agency FranceAgriMer said on Friday that 85 percent of the French soft wheat crop was good to excellent in the week to April 17, down from 89 percent a week earlier in the second successive weekly decline.

[reuters]

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